Houston, TX · Member since 2013 · 5 posts · 0 votes
Hello everyone! I'm new to BP, and love the forums.
My question is this: I'm looking to purchase an owner occupied multifamily property. Many of the properties are fully rented already. My question is this: once I close on a property, do I have to wait until the tenant's current lease is up in order to move into the property? Or do I have to look for properties that aren't at fully rented? I'm not trying to put the current tenants into a bad situation or anything. Does it vary state to state? I'm in Texas.
Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
13y
Mehran: I think you might be referring to the federal law that applies to tenants after foreclosure. Indeed, if the buyer at foreclosure sale intends to move into the property then they can give 90 days notice to the tenant per federal law. Additionally there are some rent controlled and rent stablized areas in CA where an owner can legally terminate the tenancy in order for them (or their family) to occupy the property.
As Jon Holdman says, leases remain in place after a regular sale. Are any of the currently tenants month-to-month? If not, are any tenants nearing the end of their current lease? You could negotiate first with the seller to have them serve a notice now to terminate the tenancy. That way the process is started sooner than later. And everything is negotiable. If it's a good deal, you may be able to buy out a tenant and pay them to move.
Make sure you are not in a rent controlled area. If you are, you'll probably need legal help. Terminating tenancies in those areas is a technical, costly, and sometimes lengthy process.
Investor · Wichita Falls, TX · Member since 2010 · 3k+ posts · 603 votes
13y
I believe if you or your direct family members are looking to actually move into the unit, you can. Otherwise, you have to honor the lease. At least that's how I think it is in California.
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
13y
Leases remain in place after the sale. If you loan terms require you to move into the place, you'll need to negotiate with one of the tenants to leave. Don't think there's any way for you to kick out out so you have a unit to move into.
Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
13y
Mehran: I think you might be referring to the federal law that applies to tenants after foreclosure. Indeed, if the buyer at foreclosure sale intends to move into the property then they can give 90 days notice to the tenant per federal law. Additionally there are some rent controlled and rent stablized areas in CA where an owner can legally terminate the tenancy in order for them (or their family) to occupy the property.
As Jon Holdman says, leases remain in place after a regular sale. Are any of the currently tenants month-to-month? If not, are any tenants nearing the end of their current lease? You could negotiate first with the seller to have them serve a notice now to terminate the tenancy. That way the process is started sooner than later. And everything is negotiable. If it's a good deal, you may be able to buy out a tenant and pay them to move.
Make sure you are not in a rent controlled area. If you are, you'll probably need legal help. Terminating tenancies in those areas is a technical, costly, and sometimes lengthy process.
Real Estate Investor · Englewood, CO · Member since 2013 · 988 posts · 258 votes
13y
Ian B,
This is a legal question that should be only answered by an attorney you hire in the area where the property is located. This is the law. An attorney will review your situation and provide you with legal advice and options based upon your unique situation and goals.
Denver, CO · Member since 2013 · 409 posts · 105 votes
13y
Although real estate laws vary by State, I would be surprised if any U.S. State is so tenant unfriendly that they would allow a property owner to void a lease merely by voluntarily transferring Title to someone else.
Real Estate Consultant · Camarillo, CA · Member since 2010 · 2k+ posts · 1k+ votes
13y
K. Marie Poe is on track with negotiating with the seller to break the lease. You don't want to have to deal with it after close. We were looking at a property where the owner had one of his employees (his cousin) on a five year under market lease. If we would had persued the property we would have required the seller to break the lease.